COMMITTEE FOR EMPLOYMENT AND LEARNING

Report on the Employment Bill

NIA Bill 11/01 (Continued)

Report: 1/02R

321.

Mr Gamble: We will cover that later, but if he does not pay he will be subject to penalties. If an employer fraudulently claims to have paid, that would also be subject to penalties. If it was sufficiently serious, it could lead to criminal proceedings. There will be penalties, both for people wrongly claiming, and for people failing to pay. There will also be penalties for failing to keep records that allow the Inland Revenue to determine whether individual employers are administering the scheme properly.

322.

Mr Dallat: Keeping records is, historically, one of the biggest problems faced by employees. There are difficulties in getting even a basic wage slip.

323.

Mr Gamble: Much of that administrative work is now done on computer packages for processing wages. Although many smaller firms probably do not have such facilities, records must still be kept. It is not intended that records should be voluminous, but they must be sufficient to determine whether employees were off work, whether they were paid what they were due and whether the claim that is made to the Inland Revenue for reimbursement is proper.

324.

It will be possible on occasion for some firms to claim in advance if they know when payments are due. Rather than taking money out of their cash flow, firms will be able to ask the Inland Revenue to give it to them up front.

325.

Mr Dallat: What happens if an employer goes bankrupt, disappears or moonlights?

326.

Mr Gamble: In that case the Inland Revenue will pay up.

327.

Mr Carrick: Is there any onus on employers to establish the validity of the claim, or do they simply accept any documentation at face value?

328.

Mr Gamble: All that will be spelled out more fully in the Regulations, but the intention is that the process would not be onerous; the employee would self-certify that he intended to take paternity leave at some time. He would have to give some notice about when his partner is due to give birth and that he intends to take one or two weeks' paternity leave some time in the eight weeks after the birth. There is not much likelihood of people claiming that they are having children when they are not.

329.

Mr Carrick: Your faith in humanity is greater than mine.

330.

Mr Gamble: The claim will have to be certified, and it can then be checked.

331.

Ms Taylor: I hope that an employer in a small business would be close enough to his staff to realise who is being honest; there is scope to check if you have any reason to doubt.

332.

Mr Carrick: Or whistle-blow.

333.

Mr Gamble: Statutory employment pay is not free; it will probably cost people money because they are taking a pay reduction and having a proportion of that pay made up by statutory employment pay. If their employer pays them at the standard rate when they are off, they are not entitled to statutory employment pay.

334.

The usual checks will be made, and whatever people say must be confirmed. However, the incentives may be greater for employers who try to claim that they have made payments when they have not.

335.

Mr Carrick: It would be interesting to see where the birth rates will rise during the next World Cup.

336.

The Chairperson: Yes, that is an interesting thought.

337.

Mr Gamble: Especially for the second two weeks.

338.

The next group of clauses are about resolving problems, requiring information and inflicting penalties where fraud has been committed, as well as penalties for failure to supply information and so on.

339.

Clause 8 is about resolving disputes, including those concerning a person's entitlement to paternity or adoption pay, the amount that the employer should expect to recover, and disputes over the employer's calculation of average weekly earnings, for example, in cases in which the employee is entitled to 90% of weekly earnings. The hope is that most disputes will be resolved in the workplace by discussion and if necessary, there could be some form of arbitration or mediation to deal with such problems. Ultimately, the Inland Revenue could make formal decisions about employees' and employers' rights, and there would also be a right of appeal against those decisions.

340.

Clause 8, therefore, is broadly concerned with disputes about entitlement, whether the calculations are correct, and how much the employer should be able to reclaim. It is to be hoped that those matters can be resolved easily; if not, there is a right of appeal. It is a standard type of clause to deal with matters involving the Inland Revenue's right to inspect people who are making claims, and to take decisions.

341.

Clause 9 deals with the powers of the Inland Revenue to require information. Most people comply voluntarily, but if they do not, the Inland Revenue will have powers to require people to produce records. They will deal with cases in which employers or claimants of paternity benefit are unwilling to provide the necessary information. That is a standard clause that appears in other tax contexts, such as tax credits. The information asked for must be reasonably requested and relevant. The Inland Revenue cannot ask for mountains of information. That will be set out in Regulations that will have to be agreed with the board of the Inland Revenue before they can be brought to the Assembly. The Assembly will have an opportunity to consider all the Regulations before they come into force.

342.

Clause 10 is concerned with failure to comply, and the related penalties for that. We have already had some discussion about that matter. The penalties that we talked about would not be imposed very often, because most people comply with the requirements. In case they do not, however, the penalties range from £300 to £3,000, and cover negligence and fraud.

343.

The other clauses deal with failure to comply. Clause 11 is a standard clause concerning the penalties for fraud and incorrect payments. The maximum penalty would be moderated according to the seriousness of the fault. Some people might face criminal proceedings rather than civil penalties. Those are standard measures that the Department will take to ensure that the system works and is not abused, and that people provide the information that is needed for the system to work, to be monitored properly, and so forth.

344.

Mr Carrick: Essentially, the Inland Revenue will administer the scheme, and enforce compliance. It will use its authority to do so. It has wide-ranging powers.

345.

Mr Caldwell: Clause 12 is a technical clause that is required for specific circumstances that may arise. It is about rights during and after maternity leave. It enables provision to be made for situations that arise from the extension of maternity leave, and for potential combinations of ordinary maternity leave with other new types of leave, such as adoption leave. Although those situations do not arise at present, they might do so in a minority of cases when the length of maternity leave is extended to one year, and when new rights to adoption and paternity leave come into operation. That will be dealt with by subordinate legislation and Regulations will set out the contractual benefits and rights to return that will apply in specific circumstances.

346.

The Chairperson: Can you clarify what would happen in the following hypothetical case, which the Committee will forward in writing to the Department? I apologise for the length of question - I am not sure who thought it up.

347.

A woman who is on maternity leave, having had a baby, conceives three months into her paid maternity leave. She continues on maternity leave (a further three months on paid leave and six month on unpaid leave). Her period of unpaid leave ends around the time of the birth of her subsequent child. What rights would she have regarding maternity leave and pay at that point?

348.

That is a convoluted, hypothetical case. However, it is a possible scenario. What would happen in that combination of events?

349.

Mr Caldwell: I hesitate to attempt to answer that question. That particular hypothetical case would require thought and calculation.

350.

Mr Gamble: It seems as though the woman would begin a new period of maternity leave of up to 26 weeks. However, all circumstances would have to be considered.

351.

The Chairperson: The question is whether the qualifying period is only worked out once for an employer, but covers a woman for any subsequent periods of maternity leave, even though she has not served another period of 26 weeks' work between pregnancies. Can you see what I mean? I may not have explained it well.

352.

Ms Taylor: That is my understanding of the situation. However, the Department would need to give it closer consideration.

353.

Mr Caldwell: The Department will assess that case when the Committee forwards it in writing.

354.

Mr Hilditch: How would that affect any holiday pay accrued during that period of time?

355.

Mr Gamble: My understanding is that women have certain rights regarding terms and conditions when they return to work after a period of maternity leave. If they extend maternity leave by six months of unpaid leave, there is some diminution of those rights when they go back to work. For example, they are not entitled to return to the same job, but to an equivalent one.

356.

Moreover, there may be concerns about matters such as their entitlement to benefit from any salary changes during the second period. I must check on holiday pay - it should not be assumed that it carries on.

357.

Mr Carrick: The qualifying service condition for statutory maternity pay discriminates against women who change jobs in the early stages of pregnancy. Career enhancement can, therefore, be affected. The trade unions raised that issue.

358.

Mr Gamble: Statutory maternity pay is available from day one.

359.

Mr Carrick: Is there a qualifying service condition?

360.

Mr Gamble: No.

361.

Ms Taylor: The 26 weeks' additional unpaid leave is fine.

362.

Mr Carrick: Can you see a problem with that from a woman's point of view?

363.

Mr Gamble: Career enhancement might be affected if a woman took a further six months' off after receipt of statutory maternity pay. I do not see the problem clearly.

364.

Ms Taylor: It returns to the earlier point about an established relationship with the employer. For someone to arrive, stay in a post for two weeks and then announce that she will disappear for a year is difficult for a business to accept.

365.

Mr Carrick: The trade unions were concerned about that.

366.

The Chairperson: I understand that subsections 18, 19 and 20 of the GB Employment Bill deal with the maternity pay period, the right to statutory maternity pay and entitlement. Those issues do not seem to be replicated in this Bill as it stands.

367.

Mr Caldwell: There will be another Social Security Bill.

368.

The Chairperson: That explains it.

369.

Mr Gamble: Clause 13 is rather different from the other clauses. It concerns the provision of a new right for the parents of young children to request flexible working arrangements. The procedures that employers must follow when considering requests are specified, together with the grounds on which requests can be refused. The intention is to facilitate dialogue between parents and employers about working patterns that better meet the parents' responsibilities for childcare until a child's sixth birthday while taking account of the needs of the employer. Parents can balance work and parenting responsibilities during that time. Draft Regulations will be drawn up with regard to that, and there will be a period of consultation. A task force, chaired by Sir George Bain, was set up to develop an approach to flexible working for the UK as a whole. The task force's recommendations have influenced the approach that will be followed in the Regulations.

370.

The employee must make a written request to the employer, and they then meet to discuss it. The employee must tell the employer how his flexible working proposals could tie in with the business needs. The employer is then supposed to make an assessment on whether he can accept the request or make some proposals for altering it. If he cannot accept it, he should give the reasons, based of the list of grounds set out in clause 13, of which there are about a dozen.

371.

The employee can appeal if he does not agree that the decision is properly based. The intention is that the appeal could be settled in the workplace or through an arbitration arrangement. In England, the remit of the Advisory, Conciliation and Arbitration Service (ACAS) will be extended to bring binding arbitration to this type of situation. We should probably do the same with the Labour Relations Agency's arbitration scheme.

372.

If none of that works, the employee could go to a tribunal. It is intended that the tribunal would consider whether the employer had followed the process properly and whether he had given a reasonable reason for not accepting it. It would not try to second-guess the employer's estimation of his business needs. The assumption is that the employer knows what his business is about. The tribunal would see whether the reasons for refusal, which would be listed in the Bill and Regulations, seemed reasonable.

373.

It is a type of voluntary approach to see whether arrangements can be reached rather than giving an across-the-board right to flexible working, which some people thought would be a good idea. However, businesses thought that that would be a disaster, and it would be difficult for businesses to administer.

374.

The Chairperson: In previous briefings, the point was made that the Bill focuses on one type of carer - parents. What about the perceived inequity of carers of elderly parents or elderly relatives?

375.

Mr Caldwell: The Bill must be viewed in the context of the subject matter, which is work and parents. That is what the Bill is about. Other matters such as care for the elderly would be for an entirely different forum.

376.

Mr Carrick: I want to confirm that there is no de minimis situation with small employers. If you have two or ten employees, there is no de minimis. Does it apply to everyone from one employee upwards?

377.

The Chairperson: Yes.

378.

Mr Carrick: If a retailer opens a shop six days a week from 9.00 am to 5.00 pm, must the flexibility be within that timescale? Can a proprietor be asked to open the shop at 10.00 am or close it at 6.00 pm?

379.

Mr Gamble: If an employee of a retail outlet asked for flexible working time, he would make a proposal to the employer about how it could fit in with the business. If a reasonable proposal as to how the employer could get round that is not made, the process would stop immediately.

380.

Mr Caldwell: If the employee can convince the employer that there would be no detrimental effect in starting the business an hour later, it may be possible to agree that flexible way of working. The employer may lose out or it may enhance the business.

381.

Mr Carrick: It is a judgement call. However, the employee should not be allowed to usurp the judgement of the employer, who is paying the bills.

382.

Mr Gamble: The employee would propose how flexible working could fit in with the employer's business, and subsequently they discuss that. The employer may decide that it cannot be done, or that the reasons are not strong enough, and the employee may accept that. However, if the employee disagrees with the decision, the case could be taken to a tribunal.

383.

Mr Carrick: Who would meet the costs of the tribunal?

384.

Mr Gamble: As with unfair dismissal, each side would meet its own costs, unless the tribunal chose to put them on one side, for example, for vexatious behaviour.

385.

The Chairperson: Tribunals make decisions on narrow grounds. It is not a judgement of unreasonableness; it is based on the employer stating the facts incorrectly.

386.

Mr Caldwell: It is not a judgement of the particular circumstances; it is to do with whether the process has been adhered to.

387.

Mr Gamble: There could be a dispute about whether an employer rejected a proposal on the basis of facts that were incorrect, but not on the employer's judgement of whether the business would suffer. If the employer makes a reasonable argument for the judgement, the tribunal will not dispute that.

388.

The Chairperson: Presumably you have ruled out extending those grounds because of the balance of opinion in the consultation.

389.

Mr Gamble: That part of the consultation aroused the greatest interest, as there seemed to be a demand for flexible working.

390.

Mr Carrick: There is a proposal that employers will have a duty to consider flexible working hours for the parents of children who are under six years of age; that is the cut-off point. Did that come out of the consultation?

391.

Mr Gamble: Yes. There was a discussion about children starting school. Six years was the age that was thought reasonable. It could be set at any age, but most of those consulted felt that six years of age was reasonable.

392.

Mr Carrick: The trade union representatives thought that that was an unacceptable cut-off point. They were thinking of 18 years of age.

393.

Mr Gamble: Twenty-five. [Laughter]

394.

The Chairperson: Sixty-five. [Laughter]

395.

Mr Gamble: The final batch of clauses is quite short. Clause 14 is concerned with the nature of the regulation-making powers, and that they will be subject to negative resolution by the Assembly. In some cases the Bill is inserting powers into another piece of legislation such as the Employment Rights (Northern Ireland) Order 1996. If that is the case, it is that Order that determines the process for the Regulations. If it says they are affirmative, they are affirmative. The Regulations take their tone from the legislation concerned.

396.

Mr Caldwell: Many Regulations are required to be made under the Bill. There are nine different sets of Regulations relating to maternity, paternity and adoption.

397.

The Chairperson: There is an avalanche in the offing.

398.

Mr Caldwell: Everything must be ready for the legislation to come into effect on 6 April 2003.

399.

The Chairperson: Theoretically, the Committee could ask for an extension of Committee Stage in September. However, that could cause problems with timing. How much time is there to reach Royal Assent? The Committee Stage is due to end on 23 September.

400.

Mr Gamble: Consideration Stage would have to take place in October. The Bill needs to receive Royal Assent not later than December 2002, or early January 2003, because the powers in it are used to bring Regulations before the Assembly. We hope to have dealt with those Regulations by early March so that when they come into effect in April, employers and employees will have had some time to consider them. Information will be published in the meantime, on the basis that the Assembly is expected to agree the Regulations in due course.

401.

Mr Caldwell: There are one or two as yet unsolved timing problems, the main one being that until the Bill receives Royal Assent, the Regulations cannot be made.

402.

Furthermore, babies expected to be born in the week beginning 6 April could be born prematurely as early as mid-November. No solution has been developed to deal with that problem.

403.

Mr Carrick: There is a practical issue to be considered concerning the Inland Revenue and its documentation. It would have to redesign its literature.

404.

Mr Gamble: The Inland Revenue is working on this on the basis of certain assumptions. If the assumptions turn out to be wrong, it would not be possible for everything to come on line by 6 April. The corresponding GB Employment Bill has still not reached Final Stage.

405.

Mr Caldwell: The Bill reaches Report Stage today.

406.

The Chairperson: In the past couple of days, we have received a letter from the Minister concerning the fixed-term contracts with regard to Northern Ireland being covered in the GB Bill. Previously, the Committee thought that that would apply from July, but it has been put back to October. Will that cause problems with regard to the European Union? I had thought that the date in July was fixed.

407.

Mr Caldwell: It was fixed, but a one-year extension was given. This was to apply from 10 July 2001, but it was changed to 10 July 2002. Certain difficulties arose in GB.

408.

409.

410.

Mr Gamble: I think he said that it could be changed but the convention was to keep the titles of Bills reasonably broad because amendments and additions might have to be made. Something could be added in and in the future no one would know where it is because it is in an anomalous place. There is time to think about that, and if there are strong feelings, we could ask George Gray, the chief legislative counsel, to give us a more formal response. That was his immediate reply, but we could ask him how strongly that convention holds.

411.

The Chairperson: Ms McWilliams was arguing that the title should be something like "parental and workers' rights Bill". That title may not capture everything.

412.

Mr Gamble: Flexible working is included.

413.

Mr Caldwell: That point could be addressed by the Regulations. They will be specific and the title will give a better indication of the subject matter.

414.

The Chairperson: That is a presentational political point. The public may be trying to get a handle on what the Assembly is doing, and they read the Employment Bill and wonder what difference it makes, and that is a concern. However, I appreciate the tradition and the legal point.

415.

Thank you for coming, and I apologise for the late start. The Bill is complex and I thank you for answering our questions and wish you well as you progress it.

Thursday 4 July 2002

Dr Birnie (Chairperson)

Mr Carrick (Deputy Chairperson)

Dr Adamson

Mr Dallat

Mr Hilditch

Mr R Hutchinson

Mr McElduff

Ms J Harbison )

Ms M McSorley ) The Equality Commission

Prof Barry Fitzpatrick )

416.

The Chairperson: Good afternoon. I welcome from the Equality Commission, Joan Harbison, chief commissioner, Mary McSorley, manager in the information and advice department, and Prof Fitzpatrick, head of legal policy and advice. Thank you for your written submission.

417.

Ms Harbison: I will speak first, and then Ms McSorley and Prof Fitzpatrick will talk about some issues that the Equality Commission thinks are significant. We are delighted to be here today, and have made previous representations to the Committee on this subject.

418.

The Equality Commission is keen to support and encourage anything that extends parental rights and embraces flexible working and work/life balance. The commission was encouraged by the Minister's commitment to issues in relation to work/life balance, as we believe that having a content workforce, which feels valued by having good working conditions, is as good for business as it is for the individual. The commission works hard at all levels with employers, and is particularly sensitive to issues relating to small employers when any Regulations or legislation is introduced. Clarity in the legislation, and in Regulations developed from that, will benefit anyone who is trying to implement the legislation and people such as ourselves who are trying to advise employers on the implementation of that legislation.

419.

We have some concerns about the differences between the Northern Ireland Bill and the comparable Bill in Great Britain. However, we understand that there are ways in which those differences may be covered. The commission wants to be absolutely assured that people in Northern Ireland would, in no way, be disadvantaged as a result of those differences, and that any gaps in the Northern Ireland Bill will be covered in some other way.

420.

The Equality Commission is a body that promotes equality and equity, and it is important that people in Northern Ireland do not see that devolution disadvantages them in any way. We feel very strongly about that, as I am certain that most, if not all, of the Committee does. We have particular concerns about some aspects of the Bill and about how it relates to wider legislation.

421.

Prof Fitzpatrick: We have two concerns that I will mention by way of introduction. It is difficult to react to the Bill when so much is reliant on Regulations being made later. We hope that the provisions to deal with matters in the Bill would be straightforward, but Regulations are necessary for a range of issues, for example, flexible working. Clause 13 amends the Employment Rights (Northern Ireland) Order 1996 - introducing clause 112G, subsection (2), paragraphs (a) to (n), which sets out what the Regulations should contain. Therefore we are concerned about the details that must go into any Regulations that will be made.

422.

We are also concerned about the use of affirmative resolution Regulations, especially as two EU Equality Directives are apparently to be implemented through such resolutions before the next election. Affirmative resolution Regulations leave little opportunity for MLAs to influence the content, and we would have preferred to have seen more details of those arrangements in the Bill rather than relying on Regulations.

423.

We are also genuinely disappointed that flexible working rights apply only to employees and not to workers. We have had a definition of the word "employees" for over 30 years, and many vulnerable workers are not always defined as such. As a former law professor, I would have had to examine the case law closely to ascertain who was an employee and who was not. Most European legislation, minimum wage legislation, and other such matters, use the term "worker" instead of "employee". For example, the working time Regulations, which deal with annual leave, refer to workers, yet this Bill refers to employees. The minimum wage legislation deals with pay, as does this Bill, yet even from an employers' viewpoint, employers will have to have different regimes depending on whether those who work for them are workers or employees. The Equality Commission feels that the legislation should simply use the well-established definition of worker, rather than "employee".

424.

Ms Harbison: That reinforces the importance of the clarity that I mentioned at the beginning. That sort of clarity becomes important in our work in supporting, helping and advising employers. It makes it easier for the employer and us - and any other similar bodies that - to advise people clearly and in a way in which they can implement what we say.

425.

Ms McSorley: We made some specific comments in our submission about what we would have liked to have seen on paid maternity and adoption leave, and, indeed, the new flexible working request right. Following on from Prof Fitzpatrick's point, it is difficult to make definitive comments when we do not have the detail of the Regulations. We raised some concerns in the earlier consultations, and we were slightly disappointed that the opportunity has not been taken in the Bill to look at some of the other general rights for parents, for example, parental leave and time off for dependants.

426.

The Bill could have provided an opportunity to look at some of those general areas, because we foresee that also creating some problems for employers. There is already a lot of uncertainty and confusion about the distinction between paternity and parental leave, which arose when the latter was first introduced. While we welcome all of the provisions, which are ground breaking steps in some ways, for example the introduction of paid paternity leave, statutory paternity leave and pay, we would have liked to have seen some of the measures go a bit further. There could have been an opportunity to look more broadly at an integrated maternity and parental leave scheme, which would provide rights that were individually and equally available to both parents, and would address the cultural perception that the care of young children is solely the preserve of women, as opposed to both partners. We want to give working parents more choice and flexibility. Our submission goes into more detail.

427.

Dr Adamson: As the prime reason for maternity leave is to protect the health of the new mother and baby, why do you consider that the scheme should be equally and individually available to both parents?

428.

Ms McSorley: Our counterparts in Britain also suggested this. We accept that as the primary reason, but we have concerns that extending maternity leave only, as opposed to a boarder choice of parental leave, may be perceived as being detrimental to women in practice. It could give rise to a situation where employers presume that all women of a certain age would want to take extended periods of leave for maternity reasons.

429.

We are also concerned that there could be the argument that the 26-week leave period might be sufficient for the majority of cases - for recovery or health and safety reasons - and that the additional leave could be equally available to either parent should the father choose to take that leave. There is no right and wrong, but we are concerned that there could be that interpretation.

430.

Ms Harbison: From an equality perspective, it is important that we establish how important the role of a father is in relation to the upbringing of children. We are all concerned about the lack of male role models for young children in some instances, and it is important that we encourage fathers, as much as possible, to become involved at a very early stage with the growth and development of their child. While the legislation may be for the health and welfare of the mother, we all need to be concerned about the health and welfare of the child, both psychological and physical.

431.

The Chairperson: As a supplementary to Dr Adamson's question, are you prepared to say in detail what you are recommending? Are you saying that there should be an equal amount of up to 26 weeks paid paternity leave, or are you saying that the 28 weeks should be transferable between the two parents as they choose - that could be 14 weeks each, 15 and 13 weeks each, or any permutation? Are you flexible on that point?

432.

Ms McSorley: The 26 weeks is needed, and welcomed, for the mother from a health and safety and recovery point of view. We would have liked more of a debate about the subsequent 26 weeks, and feel that this could be open to the choice of either parent. In 20% of cases the mother may be the higher earner and, in those circumstances, it would make more economic sense if the mother could go back to work when she was fully recovered and the father could take the remaining leave. However, that would not be a good option for some couples if the leave were unpaid.

433.

The Chairperson: You are not saying that the length of statutory paid paternity leave for both should be the same, but in any subsequent period over and above the 26 weeks leave for the mother, there should be some scope for flexibility.

434.

Ms McSorley: That would be best all round, and some countries have adopted that provision.

435.

Mr R Hutchinson: You have suggested that additional maternity leave should not be dependent on a particular length of service, but what will the administrative burden be on small businesses? Would it be discriminatory against employers wanting to employ, promote or take the risk of a women becoming pregnant, or, if she were pregnant, stopping her getting any further promotion? Are you not putting an unnecessary burden on small businesses?

436.

Ms Harbison: I do not believe that we are. There are ways round that, and there are provisions in the Bill to deal with that. However, I am conscious of the fact that I am speaking to all male audience. This matter is absolutely fundamental to our society, and society must decide the importance of maternity leave. There was a lot of discussion in the press recently about young women putting off having children until they were in their late thirties when it becomes much more difficult for them to conceive and have children. We in Northern Ireland are a long way from not having a replacement rate for our children, but that danger there is. Society should be concerned about the effect that the lack of maternity provision and flexible working is having on women in the workplace.

437.

Mr R Hutchinson: I do not disagree, but my following comments may seem as if I do. Northern Ireland is made up mostly of small businesses - it is a small business culture. Businessmen may agree with you totally, however, with the best will in the world, the practicality is that many small business people will say, "This is not worth it: I am going to cut my losses, and that is it".

438.

Ms Harbison: The legislation says you cannot do that.

439.

Mr R Hutchinson: No, but these are your proposals. My wife and I have had children and we know the trauma of childbirth and so on. I do not necessarily disagree with you, but this creates a terrible burden for the small businessman.

440.

Prof Fitzpatrick: The Regulations will make it complicated for everybody, and we would rather have very simple rules that could be applied easily. However, parts of the economy cannot be excluded from that. In your scenario, either we do not regulate at all, or the Commission gets a flow of people bringing discrimination cases - they suspect that they were not recruited because they were a woman of a particular age. It is swings and roundabouts. There should be discrimination law to deal with those situations, or it should be regulated in a simple, clear and effective fashion, which is what we are proposing.

441.

Mr R Hutchinson: Then that puts the other person off.

442.

Ms McSorley: From my experience of advising employers - mainly small employers - on sex discrimination, I was extremely pleased to see how willing and committed employers, large and small, were to providing equality of opportunity. However, they want, need and expect clarity in relation to what is lawful and what is expected of them, and help, guidance and support to provide that.

443.

We were reassured by the consultation exercise, and the promise of support and guidance for small employers. We are conscious that there will be no financial cost to small businesses in relation to statutory maternity pay and the proposed paternity pay. Maternity and paternity pay are recoverable from the Inland Revenue - plus a 5% compensation payment. Therefore, the main financial costs are more related to how businesses find temporary cover. The Equality Commission hopes that, with the new flexible working conditions and the general move across Europe and the UK towards increased and improved rights for flexible workers, there will be a better-qualified and extended pool of appropriate people for those vacancies that small businesses find it difficult to fill.

444.

Mr R Hutchinson: Employers can reclaim paternity pay. However, employers have visited my office in a panic because they have had to pay out such benefits. Although employers can reclaim the money, some petrified employers have approached me because the money is not paid out on the proper dates and, thus, their cash flow is affected. That system only works if everything runs according to plan, and the problem is that the system does not always work.

445.

Ms Harbison: The legislation should make it work, and that is what people must realise. The Regulations must be clear and must lay responsibility on people to meet their obligations in an appropriate manner, and it should not be beyond the capabilities of the public sector to deliver on that.

446.

The Chairperson: As a point of information, Michelle Gildernew, a Member of the Committee, is currently on maternity leave.

447.

Mr Carrick: During your presentation you mentioned equality and equity, and the need to define the role of the father. We like to think that we have a clear definition of the role of the mother, but we must define the role of the employer in order to avoid situations such as that outlined by Mr Hutchinson. We are trying to develop a social pact to ensure a work/life balance. The Committee has taken evidence from the Federation of Small Businesses and various trade unions and they may propose some amendments. Does the Equality Commission anticipate some amendments to improve the equality aspect of the Bill? In the interests of equality and equity, does the Equality Commission feel that any of the costs that result from the introduction of the Bill should be subsidised by the small business sector of the Northern Ireland economy?

448.

Ms Harbison: This is a societal question, and we are all part of that society. I take Mr Hutchinson's point, but that situation should be manageable; it should not happen. We all have a contribution to make, and it is our social responsibility. Although the legislation should not place an inordinate burden on employers, we must all take a share in the responsibility of protecting future generations.

449.

Mr Carrick: Is it your view that taxpayers, as opposed to individual businesses, should finance the administrative and financial burden of introducing the new elements?

450.

Ms Harbison: That is getting into really deep politics. The commission has not discussed that issue, and I am not sure whether Ms McSorley or Prof Fitzpatrick will want to add anything. My own perspective is that, if we are to address this as a society, politicians must lead us. Politicians must take those decisions, tell us that they are necessary, and persuade the unpersuaded that they are important for the future - especially for the future of Northern Ireland.

451.

Prof Fitzpatrick: All those provisions are based on statutory levels of maternity pay. I studied the Pregnant Workers Directive as it passed through the EU institutions. One unnamed member state was insistent that maternity pay should be at that level. There were long debates and conflicts with the Parliament, for every other state would have paid anything between 50% and 80% of earnings during those periods.

452.

My understanding is that the United Kingdom already has the lowest level of maternity pay in western Europe. Small businesses are competing against larger businesses, perhaps leading to disproportionate effects, but these measures will apply across the United Kingdom. I presume that the Republic of Ireland has similar measures.

453.

A small employer receiving a payback from the state for those payments has the least financial burden of any such employer in Europe where EU Directives apply. We are concerned that the take-up will be low in the United Kingdom. Given the low level of work and wages patterns, it will be even lower for paternity leave than maternity leave. We want more realistic levels of pay, with some money coming from the state and some from the employer.

454.

Mr Carrick: I am not calling the quantum into doubt, for in most cases it will be fully reimbursed. However, I should like to know how small employers would be recompensed for the administrative burden, dislocation and upset associated with the additional cost.

455.

Ms Harbison: Ms McSorley has already covered that. We hope that other measures will provide a means for the gap to be filled. Our great worry is that the take-up will be very low and that the Bill will therefore not have the effect which one would like. From that perspective, it is quite important that there be political leadership and that recognition of the need for such a level of commitment be voiced.

456.

The Chairperson: The Deputy Chairperson asked about amendments. I should be grateful if you could send any potential amendments to the Committee before the end of August, when it will consider whether to amend the Bill in any way. We have asked previous witnesses to do so.

457.

Prof Fitzpatrick: The commission is about to assume jurisdiction over employment discrimination on the grounds of sexual orientation. We are aware that there may in certain situations be complications as to whether it is applied to same-sex as well as opposite-sex partners. We might wish to examine that more closely before giving a written submission on the point. The statutory equality duty applies to sexual orientation. We considered the Committee's equality impact assessment, and there do not seem to be any issues on that point. However, we should like to examine that more closely before giving the Committee a written submission.

458.

Ms Harbison: There may be other areas where we are concerned about deficiencies or what we perceive as such. Does the Committee desire a response by the end of August?

459.

The Chairperson: Yes. The Committee will not meet again until September.

460.

Ms Harbison: We shall let the Committee know one way or the other so that it has a response of some sort.

461.

Mr Dallat: You have heard the Committee's negative concerns about the Bill. You said that you are concerned that there may be a low uptake. We are simply playing catch-up with other communities. How can we put a positive spin on this legislation so that small employers - indeed all employers and employees - appreciate its benefits? The other direction would be for the black economy to take centre stage again. In the past, employers frightened of income tax and national insurance contributions paid wages under the counter. A great deal of time and discussion have gone into the Bill, and if it is to affect people's lives positively, there must be more to it than such concerns as single-sex relationships.

462.

Ms Harbison: Ms McSorley spoke about that. I began by saying that I wanted clarity. One of the Minister's commitments when he introduced the Bill was to give guidance to employers. Guidance and publicity, the sort of work that Ms McSorley has carried out in the former Equal Opportunities Commission (EOC) and now in the Equality Commission, lead us to believe that employers are ready to fulfil their obligations and contribute to society. They do not want to have to take the information home and pore over language that they simply do not understand. They want it in the form of a flow chart showing what they can do and how they should do it point by point. There are ways in which we can encourage and help small employers to meet their obligations; it is incumbent on us all to do so.

463.

Prof Fitzpatrick: The reconciliation of working and family life makes for better workers. If people are not given this sort of leave, it will affect how they work. People will also use sick- or annual-leave provisions to deal with other situations, something that has a knock-on effect on such leave elsewhere. A sensible leave system covering the purposes for which people want time off is better than their taking leave regardless of the rules and self-certifying when the employer knows that they have a newborn baby. Without a proper leave system, people will take annual leave at inconvenient times because of personal circumstances. Developing better employees, and producing a coherent system of leave for the reasons for which people want to take it are aims that apply as much to small employers as to large ones, and we are promoting the new arrangements equally to both.

464.

Mr Dallat: I wish to pursue the matter, for we are entering the old realm of equality. For years, those in professions such as the Civil Service and teaching simply got time off work if there was a crisis at home. That did not apply to people at the lower end of the employment scale. There is now an opportunity for us to provide for everyone, but the Bill seems a rather dull piece of legislation. Where is the mechanism for delivering to those to whom it matters most? I am not talking about people who can get the time off, but those in manual jobs who cannot. I am sorry if that sounds cruel, but it is a perfect example.

465.

Ms Harbison: We have a great many concerns. We have talked long and hard about people in low-paid, low-status jobs, who are some of the most marginalised members of our society. They are entitled to the same rights as anyone else. However, such jobs are not only found with small employers.

466.

Mr Dallat: I am not sure how the matter of small employers entered into the discussion.

467.

Ms Harbison: I am sorry. Perhaps I was mistaken.

468.

Ms McSorley: There is a great deal of informal provision.

469.

Mr Dallat: That is the word that I should have used.

470.

Ms McSorley: The Bill will not require many employers to do any more than they do already. It could be argued that the more positive employers retain their workforces. Publicity will be a major challenge for the Government, as acknowledged in the initial consultations on the work and parents' Green Paper. Consultees were asked about requirements, and all were clear that an education exercise was needed to effect a cultural change on the part of employers and workers. They need guidance and support to enable them to do that. Employers large and small must be reminded of the benefits.

471.

We argue that what is good for large business is also good for small business. In some cases, flexibility can be delivered more easily in smaller concerns. Traditional ways of working sometimes have to be challenged to reach the desired situation. The Bill is a stepping stone to a better position.

472.

Mr McElduff: My concern is for the excluded individuals and categories, and how the different treatment of employees on the part of certain employers can be addressed. Does the failure to get the work/life balance right have health and safety implications?

473.

Prof Fitzpatrick: I mentioned that differential in my opening remarks. The definition of "worker" is very wide. If you are not in business on your own, with customers and clients, then you are a worker. Agency workers such as on-call workers or casual workers of various descriptions may not fit into that definition because of the triangular relationship involved. Having been a tribunal chairman myself, I can say that being defined as an employee depends on the discretion of those sitting.

474.

The most vulnerable members of the workforce are in doubt as to whether they are protected. A tribunal may be required to determine that, but the most vulnerable people in society are least likely to go to tribunal. There are detriment measures in the Bill to deal with people claiming their rights. However, even with those sorts of detriment provisions in place, people in employment may not always attempt to have their rights enforced.

475.

The Equality Commission does not have jurisdiction over those statutes. We should like to be given jurisdiction over such equality-related matters in a single equality Bill, since they are so close to equality questions that people come to us. A casual worker might come to us alleging a case of indirect discrimination, but if the legislation had applied to workers, he or she would not have had to trouble us.

476.

There may be issues related to health and safety. Some aspects of working-time regulations are governed by health and safety inspection. Those rights might be enforced through inspection processes rather than through individuals bringing their cases to tribunal.

477.

The Chairperson: Can you envisage any implications under section 75 of the Northern Ireland Act 1998 arising from the right to request flexible working, which, as drafted, is limited to parents with children under the age of six or disabled children under the age of 18? What about equality issues relating to parents of older children or carers of adults?

478.

Ms Harbison: We are concerned about that and about extending provision only to parents of children under six. It raises issues under section 75.

479.

Ms McSorley: In our submission we said that we should like to see the right being made available to parents of children of compulsory school age. There was a suggestion in the Bill that Regulations could provide for an alternative cut-off point. The Commission certainly feels that the right should be made available in relation to disabled children while they remain dependent.

480.

Mr Carrick: I should like to ask a question on the employee-versus-worker issue. Should that be the basis of an amendment? If so, would it cover self-employed workers? Would you have to divide those who work for an employer from those who work for themselves? Does that not pose a problem?

481.

Prof Fitzpatrick: It still poses a problem, but it catches many casual workers. Employment law has not developed to meet the variety of employment relationships that have proliferated over the past 10 years. There is a genuine question concerning people who might be self-employed for tax purposes and who are still not in a client relationship with the person employing them - they would be included as "workers" under the definition.

482.

The legislation moves the goalposts so that there is much less controversy. It catches some very vulnerable people who are clearly not employees but workers. It tries to draw the line at the genuine self-employed rather than those who have subservient relationships of various descriptions without coming within the definition of "employee".

483.

Mr Carrick: If we use the term "worker", we specifically exclude the self-employed unless we can find a mechanism to include them. It has its origin in the Inland Revenue definition, which is that of a relationship between master and servant. Is that a definition with which you go along?

484.

Prof Fitzpatrick: That is the definition of an "employee". Terms such as "mutuality of obligation" cater for people such as casual workers who need not legally turn up or be employed. However, they do indeed turn up, for they need the work and are employed when they do so.

485.

That level of legal semantics means that quite vulnerable people are not protected in the same way as more established workers. On the equality front, though we cannot say for sure, we suspect that many of those in more vulnerable positions are women. Such women are therefore losing out. With so many other areas of employment law being driven by the term "worker", it is disappointing that the Bill is returning to the term "employee". "Worker" would be much more consistent and appropriate.

486.

Mr Carrick: Do you not feel strong enough to suggest an amendment?

487.

Prof Fitzpatrick: We should be perfectly happy to propose one to you.

488.

The Chairperson: Thank you. That was very helpful.

Thursday 5 September 2002

Dr Birnie (Chairperson)

Mr Carrick (Deputy Chairperson)

Dr Adamson

Mrs Carson

Mr Dallat

Ms Gildernew

Mr Hilditch

Mr R Hutchinson

Ms McWilliams

Mr Roy Gamble ) Department for Employment
and Learning

Mr William Caldwell )

Ms Eileen Regan ) Assembly Research and Library Services

489.

The Chairperson: We will consider the general principles of the amendments this afternoon. It remains to be seen whether we will complete a clause-by-clause consideration today. Eileen Regan of Assembly Research and Library unit and Information provided the paper at tab 4a of the Committee's information pack in response to legal and statistical questions that I asked in August about possible amendments. I do not propose to talk about the paper now, but I will refer to it during our discussion of certain amendments because it expands on certain points and provides relevant evidence.

490.

In tab 4h the Minister outlines her proposal to introduce two amendments during the Consideration Stage. The first will create an exemption with respect to the right to request flexible working hours for persons who work in the armed forces. The second would introduce the Labour Relations Agency to arbitrate in cases in which there is dispute over a request for flexibility.

491.

Mr Carrick: Do the armed forces include the Territorial Army?

492.

Mr Gamble: I am not sure. The amendment was made, at the request of the Ministry of Defence, to the corresponding Employment Act 2002 in Great Britain. It is designed to deal with problems that arise when staff are required to carry out activity immediately, for example, in national emergencies, for example, if the Army were sent overseas. I will have to check which organisations the armed forces comprise.

493.

The Chairperson: We shall write to the Minister to clarify that point.

494.

Ms McWilliams: Surely the amendment would apply to other categories of emergency workers such as ambulance crews and fire fighters?

495.

Mr Gamble: The emergency services have schedules and arrangements for dealing with emergencies: that is their job. Presumably the armed forces deal with unforeseen circumstances that involve going overseas with little notice.

496.

Ms McWilliams: Would the amendment apply only in relation to deployment overseas?

497.

Mr Gamble: I do not know: it could be used for internal deployment also. That is not specified.

498.

Ms McWilliams: You said that it was designed to cover emergencies overseas. The other issue would be that it relates to European Directives through which other European countries have exempted their armed forces.

499.

Mr Gamble: I do not think this amendment is related to a European ruling.

500.

Ms McWilliams: European countries have looked at the issue.

501.

Mr Gamble: I do not know the answer to that.

502.

The Chairperson: Do you want us to pursue that with the Minister?

503.

Ms McWilliams: Yes.

504.

Mrs Carson: In the second amendment proposed by the Minister, the Labour Relations Agency would be available as an alternative to the industrial tribunal system. Would cases go to the industrial tribunal system first and go to the Labour Relations Agency only if the system were full? Would people be given choice of arbitration? Who would make the decision?

505.

Mr Gamble: The Labour Relations Agency recently introduced an arbitration scheme for cases of unfair dismissal. The rules of the scheme state that if you choose that scheme you give up your right to go to a tribunal. It is a voluntary scheme; both parties in a dispute would decide whether to use that procedure or a tribunal.

506.

Mrs Carson: Therefore it would be an either/or situation.

507.

Mr Gamble: Yes.

508.

The Chairperson: Before discussing possible amendments, or amendments in principle, I stress that much of the Bill is extremely welcome, in three respects: first, the extension to maternity leave; secondly, the introduction of new rights relating to paternity and adoption leave, and thirdly, the obligation on employers to consider seriously requests for flexible working. The provisions that we are examining mirror those in the Employment Act 2002, which has already been enacted in Westminster.

509.

Before we look at the amendments I would like the Committee's agreement that we seek an extension to the Committee Stage, if only as a safety net that we may not have to use. At the moment the Committee Stage ends on 20 September 2002. I would like the Committee's approval to seek an extension until 18 October 2002.

510.

Members indicated assent

511.

The Chairperson: Let us discuss whether there should be amendments to the Bill, and, if there is time, we shall then carry out a clause-by-clause consideration. Do members have any suggestions or thoughts about amendments?

512.

Dr Adamson: Perhaps the term "employee" should be changed to "worker".

513.

The Chairperson: How do members feel about that? There are a series of pros and cons to such an amendment. The research paper provided by the Assembly's research team gives some background on that. The argument for it would be that it would incorporate some of the grey areas - in the last 10 to 20 years the way in which employment contracts are defined has changed. The use of the term "worker" would be perceived as more equitable, since a disproportionate number of those in the grey categories, who fall outside the definition of employee but are defined as a "worker", are women. A third argument for such an amendment might be that it anticipates an inevitable change, perhaps as a result of European legislation.

514.

The arguments against are that it might close off an element of business flexibility; that it would impose more costs on small firms; and that there is an ongoing consultation on the definition of "employment" in the context of various types of employment rights.

515.

The Assembly Research and Library team's paper attempts to estimate what the additional cost of extending the definition from "employee" to "worker" would be. The estimates have to be rough and ready, because the data is not readily available.

516.

Mrs Carson: The definitions of "employee" and "worker" are completely different. An employee is someone who has a contract of employment. The term "worker" may include part-time and seasonal staff, therefore their inclusion in the Bill could present many difficulties to small businesses. Even someone who does relief milking on a part-time basis would be entitled to paternity or maternity pay, and that might be the last straw for a small business. We must think carefully about changing the terminology.

517.

The Chairperson: The Northern Ireland Equality Commission, which was one of the three groups that gave evidence to us, suggested such an amendment. They argued that in employment law each statute often adopted a different approach to defining the category that should benefit from such legislation. There would be a case for using the term "worker", because it was used in the Employment Rights (Northern Ireland) Order 1996, but other legislation, such as the National Minimum Wage Act 1998 uses a different definition. We have a choice to make.

518.

Mrs Carson: What definitions are used in the rest of the United Kingdom or in the European Union?

519.

The Chairperson: In Great Britain the term "employee" is used. The Bill as it stands is almost identical to the provisions of the Employment Act 2002, which was enacted ahead of us. If we amend this Bill in the way that has been suggested, from "employee" to "worker", we will have a different definition from that used in England, Scotland and Wales. As for other European countries, I do not know the answer to your question. You would need to seek advice from Assembly Research and Library , and it might be quite difficult to get a clear comparison.

520.

Mrs Carson: The Committee had representation from small firms and businesses, and coping with such an amendment might just be the last straw. We have to consider the matter carefully.

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